National home prices spike – but hot markets are skewing the average

The average price of a Canadian home sold in January spiked 17% from a year ago, led largely by continued price gains in Toronto and Vancouver, according to a CBC News report.

The average home price in Canada last month was $470,297, according to CBC News. However, if Toronto and Vancouver were removed from that estimate, the average Canadian home would be worth $338,392, and the year-over-year price gain would drop from 17% to just 8%. If all of British Columbia and Ontario were eliminated from consideration, the average home price would have actually dropped 0.3% to $286,911.

“While we continue to believe things just can’t get any hotter, markets in B.C. and Ontario continue to prove us wrong,” TD economist Diana Petramala told CBC News. She added that for Toronto and Vancouver, “every month of double-digit price growth raises the risk of a deeper home price correction down the road.”

And while the Vancouver and Toronto markets skewed the national average up, there are still signs of a tightening market, CBC News reported. Four provinces – Alberta, Saskatchewan, Nova Scotia and Newfoundland and Labrador – saw year-over-year price declines.

Across the country’s 26 largest cities, the average January price gain was 4.7%, CBC News reported. Vancouver saw the strongest price gain with 31%. The weakest was Newfoundland and Labrador – considered a single market – which saw a 10% decline.